Cramer's 'Mad Money' Recap: Looking Abroad for Growth

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NEW YORK ( TheStreet) -- Higher taxes and disarray in Washington has caused 2013 to become the exact opposite of 2012, Jim Cramer told "Mad Money" viewers Monday. Cramer said all the stocks that investors fled from in 2012 are now the hot commodities of 2013.

Cramer said January usually sets the trends for the year, and this year the trends are to stay away from everything domestic and stick with big international companies that can offer growth.

This certainly is true of China, he said, where the iShares FTSE China 25 (FXI) , a fund he owns for his charitable trust, Action Alerts PLUS, has been on fire. The trends in China are so strong, he said, that even stocks like Coach (COH) , Starbucks (SBUX) and Wynn Resorts (WYNN) are all working again.

Aerospace is an international business, noted Cramer, as are autos, which is why Boeing (BA) and Honeywell (HON) are up, along with Ford (F) and General Motors (GM) .

Biotechs have been held back by Europe, Cramer said, but no more, as Celgene (CELG) and Allergan (AGN) have proven. Even Banco Santander (SAN) , the poster child for the European debt debacle, is now investable.

So where does that leave things here in the U.S.? Cramer said that with Washington a mess and people now earning less in their paychecks, pickings are slim. He said housing-related stocks and anything that goes into a home still works, as does some financials and technology. However, for the most part, it's harder to make money in the U.S. when people have less to spend.

Playing Matchmaker

With the housing market on the mend, Cramer played matchmaker and suggested that Masco (MAS) should merge with Fortune Brands Home & Security (FBHS) to create a housing powerhouse. He said while both companies will likely have a strong 2013, they'd do even better as a combined company.

Why would a Masco Fortune be a match made in heaven? Because while both companies have already restructured themselves and taken out a ton of costs, a combined company could take out even more, eliminating duplicate functions and dramatically increasing margins by also getting better pricing on materials.

Next, the combined company would also have more leverage over its two main customers, Home Depot (HD) and Lowe's (LOW) , and could negotiate better pricing and shelf space.

Cramer said he also likes a merger based on international exposure as the combine company would have a solid foothold in China and other key markets around the globe.

Cramer last recommended both Masco and Fortune a year ago and since then Fortune has risen 72% while Masco is up 48%. He said a combined company would be able to head even higher given how early we are in the U.S. housing cycle.

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